Cost of fixing Bertha may top $125 million, but who will pay?

Highway 99 contractors said Tuesday they expect the costs to repair and restart tunnel machine Bertha to reach at least $125 million.

Chris Dixon, project director for Seattle Tunnel Partners (STP), mentioned the figure during a briefing Tuesday to The Seattle Times’ Editorial Board, which is responsible for writing and choosing opinion pieces.

However, the $125 million isn’t a hard figure, and who will pay is yet to be determined.

That amount is 1½ times the $80 million STP paid for the machine, completed in 2012 by Hitachi Zosen in Osaka, Japan.

This is the first time contractors or the state have publicly offered a glimpse of the costs associated with restarting the world’s biggest tunnel drill, which has advanced only four feet since Dec. 6.

The figure includes costs to build a 120-foot-deep pit in front of the machine; hoist the drive system to the surface, where the main bearing can be replaced; pay for labor, including overtime; and pay tugboat operators and other subcontractors, Dixon said.

STP already filed a “request for entitlement” to be paid by the Washington State Department of Transportation (WSDOT), on the premise that a steel well casing, left in the ground after WSDOT groundwater tests in 2002 and 2010, damaged Bertha just before the machine stalled in early December.

The state says it has rejected the request but would not immediately release the documents Tuesday.

State officials say the information about the pipe location was given to STP in technical documents and that contractors were responsible for knowing about the pipe and avoiding trouble.

To what extent the pipe contributed to Bertha’s breakdown is still being debated.

Dixon said the responsibility probably will be sorted out by a dispute review board of three tunneling experts.

Failing that, the two sides could wind up in binding arbitration or even a lawsuit, where a final assignment of blame and cost might take years.

Besides negotiations between the state and contractors, STP is also dealing with Hitachi Zosen over repair costs and any warranty coverage.

Dixon also said STP notified its own insurers in February of a potential claim.

Where else could $125 million come from?

In the short term, Dixon said repairs would be partly funded by $40 million the state agreed to release this year.

This money was routinely deducted by the state from its monthly payments to STP, in case the state needs to pay taxes or damage claims, Dixon said.

To replenish money the state is releasing, STP will provide a bond, from which the state could draw to pay unexpected taxes and claims.

And the Highway 99 budget can draw on contingency money — $78 million unspent as of February.

State law says budget overruns would be borne by Seattle-area landowners who benefit from the tunnel, but the state Attorney General’s Office in 2010 deemed the clause unenforceable.

If the state is unable to assign cost overruns to STP, those would need to be dealt with in the state transportation budget.

House Transportation Committee Chairwoman Judy Clibborn, D-Mercer Island, said she was surprised dollar figures are emerging so soon, before repairs are done.

“We’re about a year from when I thought this would happen,” she said.

However, the contract requires STP to send any change-order request to the state within a few weeks of finding a problem.

“They’ll make every attempt to recover what they can,” Clibborn said.

Already, STP stands to lose up to $25 million in incentive pay, because it will miss its earlier goal to finish in December 2015.

The latest target is to open the four-lane tunnel to traffic by November 2016.